Monash University Handbook 2010 Postgraduate - Unit

Synopsis

This unit provides students with training in information economics and applied game theory. Discussion of key concepts in game theory; the nature of different kinds of information asymmetries (whether the informed party has private knowledge about certain events, whether he/she can undertake actions unobservable to others); and economic implications. Explore how different incentive mechanisms (signalling by the informed party and screening by the uninformed party) can be used to mitigate the impact of asymmetric information.

Objectives

The learning goals associated with this unit are to:

• understand the key concepts in game theory, as well as the nature and economic implications of different kinds of information asymmetries
• understand how different incentive mechanisms -- for example, signalling by the informed party and screening by the uninformed party may be useful in mitigating the impact of asymmetric information on economic activities
• critically evaluate the extent to which a particular application of information economics and game theory succeeds in generating new testable implications regarding the phenomena under study
• construct formal models to study the importance of informational problems in explaining phenomena that are of interest to them.

Assessment

Within semester assessment: 50%
Examination (2 hours): 50%

Chief examiner(s)

Vai-Lam Mui

Contact hours

3 hours per week

Prerequisites

ECC5650